When a profit-seeking firm sees that no one wants its services, it finds ways to lower prices and improve services.
The United States Postal Service does what government agencies do: it raises prices and cuts services.
In its press release announcing the cessation of Saturday delivery of mail in August, we learn the following.
WASHINGTON — The United States Postal Service announced plans today to transition to a new delivery schedule during the week of Aug. 5, 2013 that includes package delivery Monday through Saturday, and mail delivery Monday through Friday. The Postal Service expects to generate cost savings of approximately $2 billion annually, once the plan is fully implemented.
Let’s analyze this. It will save $2 billion a year. What is its budget? The press release has this is at the end. “With 32,000 retail locations and the most frequently visited website in the federal government, usps.com®, the Postal Service has annual revenue of approximately $65 billion and delivers nearly 40 percent of the world’s mail.” So, the $2 billion in savings is 3% of its budget. So, to save 3%, it reduces its delivery of mail by 16.6%.
Why didn’t it just fire 3% of its work force? Or 5%? Because its work force is unionized. So, it stiffed the participants with no clout: the public, who cannot strike. Instead of firing anyone, we learn the following: “The operational plan for the new delivery schedule anticipates a combination of employee reassignment and attrition and is expected to achieve cost savings of approximately $2 billion annually when fully implemented.” Attrition? That means “quits, retires, or dies.” That means “leaving a tenured job that pays above-market wages.” That means later. Much later.
You know a government agency is in big trouble whenever it uses the word “challenge.” It is dead in the water if it uses “challenges.” In government circles, the word means “politically unsolvable; therefore, kick the can.” We read:
Given the ongoing financial challenges, the Postal Service Board of Governors last month directed postal management to accelerate the restructuring of Postal Service operations in order to strengthen Postal Service finances.
So, its problems are “outside the Postal Service’s control.” These problems are not mentioned: email, social media, Skype, and similar free services. You know: the free market. In the good old days, the Post Office had a government-mandated monopoly. It could keep out competitors, and it did. But now all this has changed. A gigantic government bureaucracy lost its political mojo after 300 years. Congress revoked the monopoly. The Internet took over.
Then what is the solution? A government bailout, of course.
While the change in the delivery schedule announced today is one of the actions needed to restore the financial health of the Postal Service, legislative change is urgently needed to address matters outside the Postal Service’s control. The Postal Service continues to seek legislation to provide it with greater flexibility to control costs and generate new revenue and encourages the 113th Congress to make postal reform legislation an urgent priority.
We are assured: “The Postal Service receives no tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations.” Then what has Congress got to do with it? Why is “legislative change” necessary? Because the USPS is still a government enterprise. in the words of the press release, it is “A self-supporting government enterprise.” Enterprise? What enterprise? There is no enterprise at the USPS. There are only price hikes and service reductions.
This is government at its best. This is as good as it gets. The Post Office used to get the federal government to fine competitors and put them out of business. Now it can only cut Saturday services.
One reform will work: sever all of its connections with the government. Turn it into a purely free market enterprise. See what happens. I know what would happen. No Friday deliveries. Then no Thursday deliveries. Then no mail deliveries at all.
No one would notice.
The USPS wants a bailout. It wants permanent bailouts. Let’s hope Congress says no. Return to sender.